25 May OTAs or the hotel’s own website? What the experts say
Hotel owners are becoming increasingly aware of the fact that they are competing with online travel agencies’ own brands in the search engines. Preferente.com states that some big hotel chains have chosen to ban OTAs bidding on Google Adwords. Still, most companies in the sector have to accept these powerful brokers in the struggle for client acquisition and positioning on the search engine results page.
According to a study by Mirai 45% visited the hotel’s website but ended up finalizing the sale on Booking, 38% didn’t use the hotel’s website to book but only to look at pictures, location, etc.; 12% stated that it was more expensive, so that, as the CEO of Mirai says, « the price issue is not as ‘under control’ as hotels like to believe », another 12% didn’t find the option they needed (type of bed, room, payment method, cancellation policy, etc.); 10% felt that for the same price, they had more faith in an OTA, confirming that “price parity is slow suicide for hotels“; 4% didn’t trust them, another 4% said that, unlike on Booking, on the hotel’s website there were no rooms available, and 1% found it difficult to use.
This is why Delgado recommends that hotels clearly indicate on their website not only their prices, but also the booking conditions, because although they might be the same as on Booking, if the user is not made aware of this, he is likely to choose to do his transaction on the OTA.
These results show the limited impact of the ‘OTA Billboard effect’ of Booking where clients discover the hotel through the OTA but make their reservations on the hotel’s website, according to César López, head of Business development at Mirai.
Juan Uribe, Production Manager of the online agency Odigeo, also referred to the agreement with Booking for hotel reservations.
The way Uribe explains it, “In Europe, Odigeo and Booking signed a sales agreement a year ago. Today we can offer our clients a great combination of channels, as we have to streamline the online resources of flights and packages. More than a consolidation, it offers the most competitive advantage and the best allocation of resources. “
In any case, hoteliers are worried about the “increased cost of OTA margins” says Manuel Valenzuela, online sales manager of Catalonia hotels.
“We have to work with the online agencies, provided the margins are acceptable”, adds Valenzuela. Ricardo Fernandez Flores, Professor of Commercial Law and member of the Spanish Association for the Defense of Competition explains, in the report “Bad practices in the distribution of the hotel product via intermediaries”, that the information provided by OTAs on the availability of hotel rooms is a frequent source of conflict.
For example, the expert explains, recently the Commercial Court of Paris condemned Expedia and Hotels.com to pay half a million euros to a hotel association in compensation for bad business practice that misled the consumer and affected his purchasing process.
In this specific case customers trying to book nights in certain hotels in Paris through these popular OTAs, saw the following message: “There are no rooms available for the selected dates”. While in reality, the hotel did have rooms available, but only accessible through its own website.
You can’t make the customer believe that there are no availabilities when there are”, explains Ricardo Fernández Flores. Following the decision of the Commercial Court in Paris, the OTAs not only had to pay a fine of half a million euros to the hotel association, but also to change the message offered to the consumer, so that it now says more clearly, without asterisks: “There are no places available on our website.”
Ricardo Fernandez also gives the example of a hotel in Fuengirola, which decided to terminate its contract with a dotcom because the dotcom, having exhausted their allotted rooms, informed consumers that the hotel was full. Results: the hotel was losing customers, especially those who wanted to book longer stays.
Mark Forrester, CEO of Occupancy Marketing, published in Tnooz five points the hotel owner should bear in mind to recoup some of the revenue lost to the OTA:
- Invest in your own brand advertising:
- flash sales
- Best Price Guarantee
- Encourage customers to book directly the next time
- Easy to use booking engine